Silvio Berlusconi promised to step down as Italy's prime minister after parliament passes a "stability bill" containing economic reforms demanded by the European Union.

"If I must die, I'll do it in the House," the Italian leader declared.

Berlusconi's decision comes after he failed to win the full majority in a key parliamentary budget vote.

The embattle premier won approval on a measure involving 2010 state finances, with 308 votes. However, 321 lawmakers abstained -- a clear sign that support for Berlusconi is waning amid Italy's growing financial crisis.

"This vote is a certificate that the government doesn't have the majority in this chamber. I ask you, Mr. President, I strongly ask you that you finally realize what the situation is and that you resign," Pier Luigi Bersani, leader of the opposition Democratic Party, said.

"If you won't do it, and I can't believe you won't, the opposition will consider further measure because we can't go on like this," he warned.

Investors are increasingly worried about whether the eurozone's third-largest economy will be able to pay back all of its debt.

The situation has many doubting that Berlusconi can push through the government cutbacks and reforms Italy needs to get through the crisis.

"We asked him to step aside, take a step to the side," Northern League leader Umberto Bossi told reporters ahead of Tuesday's vote.

Italy, the eighth largest economy in the world, has a debt of $2.6 trillion. It is considered by some economists too big to bail out.